Repo Rate, Reverse Repo,CRR

We quite often keep hearing these terms and also keep hearing that with change in these , there is a possibility that Interest Rates offered by banks may either increase or decrease. So what are these terms that we keep hearing , here is my understanding.

Repo Rate
Whenever the banks have a shortage of funds they borrow from the RBI. Repo rate is the rate at which banks borrow money from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate.

Reverse Repo Rate
Reverse Repo rate is the rate at which RBI borrows money from the banks. An increase in Reverse repo rate can cause the banks to lend more money to the RBI.This can cause the money to be drawn out of the banking system or economy .

Cash Reserve Ratio
Cash Reserve Ratio (CRR) is the amount of money that the banks have to deposit with the RBI. If RBI decides to increase the percent of this, then the available amount with the banks , for lending to general public reduces. RBI uses this method (increasing of CRR rate), to drain out the excess money from the banks.

How does "drain out the excess money" control inflation ?
Well the logic used is that , when there is too much money floating in the economy , people are willing to pay more for commodities or simply put , when lot of money chases a commodity , price of that commodity keeps increasing ( especially , when there is limited supply ) . So pulling out money from the market using the CRR , or by making cost of borrowing money more, by increasing the interest rates , RBI tries to control the amount of money( Liquidity) in the system . Hence tries to control inflation from the demand side , as there is nothing much it can do about the supply side